Technical Analysis vs. Fundamental?

T

tradingbiscuit

I've been learning to trade stocks for a while now and so far on all my trades (about 10) I've either made a loss or a very small profit. At first I just didn't have enough knowledge but even by studying extensively my trades have failed recently.

For me technical analysis seems useless now.

When you draw support and resistance lines, you have no idea if it will break out until it actually does. So you can't rely a lot on those even though they're supposed to be the main strategy in trading. Even if it doesn't break out, the price might not increase by a lot which will result in a loss for people with smaller accounts like mine because of the fees.

Candlesticks are also unreliable as you cant rely them on predicting price movement as a lot of time it will be wrong. (1/3 of the time as i read somewhere)

Patterns don't occur as often as you would like them to, especially the bullish ones. Even if they do, it is difficult to predict price when you use them in conjunction with S&R and candlesticks.

Even if we consider all of the above as reliable, large buyers influence the market and some even manipulate which overpowers all of the above. And you have no idea of where this occurs without reading the tape, which I don't have access to because of the costs.

Most of the indicators are useless and don't predict the price direction most of the time.

I know people make profit from technical analysis but they also make a substantial amount of losses too. However with fundamental analysis you can predict how the firm is going to perform in the future (hence predict the stock price).

Correct me if I'm wrong and show me the correct ways of technical analysis if there are any because after all my research I still don't understand.
 
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Someone ring the fight bell!

Nah, but seriously...when I first began trading, I thought of T/A in the same way until I began to think of it in terms of price action. Here's the deal.

First off, T/A isn't a prediction tool but a tool which helps one to spot the lowest risk buying/selling areas.

The part about support and resistance. Betting on breakouts is a fool's game. Breakouts do occur but betting on them is gambling in many cases. If you are gonna bet on a breakout, you could wait for it to occur and get in on the pullback. Or, if you're waiting on an upside breakout, the best thing is to buy at a previous point of support and see how it acts when it reaches a resistance level. If the breakout doesn't occur at resistance, you have a chance to get out with a decent profit. If it does occur, you will have gotten in from nearly the bottom. This is the approach that I take everyday.

Secondly — in an uptrend, buy at support levels. In a downtrend, sell resistance areas. Never buy at resistance or sell at support in anticipation of a breakout because, as I said before, that's gambling.
 
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Neither technical nor fundamental for me.
But well cooked please. I mean, bleu, saignant, à point ... Bien cuit Quoi !

It takes a long time to ask the good questions.
 
speedo said:
It takes a lot of time and effort before you can see the trees within the forest.
More...
%%%.
I like TA + Fundamentals, in that order.;
apple trees may bear fruit in one year or more likely, several years
I liked Hurricane Hydrocarbons,[lived its name] but i came so close to buying a IBD[Investors Business Daily] sell , like Magnum Hunter; i stopped trying to predict stocks. ETFs trend better, down trends + up trends.Good question, TradeB.
 
murray t turtle said:
Good question, TradeB.
More...

Good Question ?!
It's like asking whether:
- BayesianISM or FrequentISM
- DeterminISM or IndeterminISM
- CapitalISM or CommunISM
- MaterialISM or IdealISM
....

Yeah, we can talk philosophy,
Or worst DualISM ...

But, unfortunately, philosopher
aren't great engineer nor scientist..

Or at least, it's nit necessary for a great trader to be a "great" philosopher.
 
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When it comes about trading,
It all comes down to that equation:

$(Gain) * P(Gain) - $(Loss) * P(Loss)

Expectency.

Now it's your job (as a trader)
- To know the Rules of the Game
- To Turn them Upside Down
- To Hack them

TA or not.
 
Money Trust said:
Someone ring the fight bell!

Nah, but seriously...when I first began trading, I thought of T/A in the same way until I began to think of it in terms of price action. Here's the deal.

First off, T/A isn't a prediction tool but a tool which helps one to spot the lowest risk buying/selling areas.

The part about support and resistance. Betting on breakouts is a fool's game. Breakouts do occur but betting on them is gambling in many cases. If you are gonna bet on a breakout, you could wait for it to occur and get in on the pullback. Or, if you're waiting on an upside breakout, the best thing is to buy at a previous point of support and see how it acts when it reaches a resistance level. If the breakout doesn't occur at resistance, you have a chance to get out with a decent profit. If it does occur, you will have gotten in from nearly the bottom. This is the approach that I take everyday.

Secondly — in an uptrend, buy at support levels. In a downtrend, sell resistance areas. Never buy at resistance or sell at support in anticipation of a breakout because, as I said before, that's gambling.
More...


Ok. A stupid question but you're saying buy at support levels in an uptrend. How do i know that the support level isnt gonna act as the resistance level since it probably would've acted as that in the past and has the potential for that, so when buying at the 'support' what if the price rebounds back down.
 
On that subject.
There ain't better than Jessie Livermore.
Have you glanced at Reminiscence of a Stock Operator ?

It's ok to fail. Make a loss.
But keep it small. Nothing gonna be 100% sure.
And I'd consider an accuracy of 50% amazing.

Don't be afraid to lose. But make it confortable.
Because you're going to lose. A lot.

Cut short your loss and let your profit run,
Have you already heard that ?

Your system will experience draws.
But design it to handle them.

And to max your reward when your trades go into your favor.
 
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